Feb 16, 2017 10:47 AM IST | Source: Moneycontrol.com

Sell USDINR; target of 66.80 - 66.60: ICICI Direct

ICICI Direct expects US dollar to meet supply pressure at higher levels. Utilise upsides in the dollar to go short on the USDINR pair. Sell February Futures with a target of 66.80 - 66.60.

Sell USDINR; target of 66.80 - 66.60: ICICI Direct
ICICI Direct's report on currency

Debt market  
Government bonds rose for the first time in three sessions, as some  investors made purchases at lower value buying levels ahead of US CPI  data  • The benchmark 6.97% 2026 bond yield fell to 6.86% from 6.88% in the  previous day  • Yield on the US 10-year rose to  2.49% from 2.47% on higher than  expected CPI data.  

Forex (US$/INR)  
The rupee was little changed against  the US currency, as foreign banks’  dollar sales offset weak domestic equity markets while markets remained  cautious ahead of CPI data  • The US$ lost against major currencies as profit booking set in at higher  levels from gains accrued in the previous few sessions. Odds for a June rate hike rose to 80% on hawkish Fed chair comments and higher retail sales and CPI data, which increased to 2.5%.  

US$/INR derivatives strategy  
In the currency futures market, the most traded dollar-rupee February contract on the NSE ended at 66.97. The February contract open interest fell 5.30% from the previous day • March contract open interest rose 10.64% from previous day • We expect the US dollar to meet supply pressure at higher levels. Utilise upsides in the dollar to go short on the US$INR pair.   

Intra-day strategy
US$INR February futures contract (NSE) View: Bearish on US$INR
Sell US$INR in the range of 67.00 - 67.10 Market Lot: US$1000
Target: 66.80 / 66.60 Stop Loss: 67.20
Support Resistance
S1/ S2: 66.90 / 66.70 R1/R2:67.25 /67.45







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